President Nicolas Sarkozy should resist pressure to further tighten France’s 2012 budget and press for the implementation of a European agreement to boost the region’s economic credibility, Senator Philippe Marini said.

Debate about the need for what would be a third round of tax increases and spending cuts since August has surfaced in recent weeks as national statistics office Insee judged that France is in a recession and three major rating companies said they’re considering stripping the nation of its AAA status.

 “Austerity for the sake of austerity isn’t a solution,” Marini, speaker of the French Senate’s finance commission, said in an interview. “There is a huge problem of credibility about euro-zone governance. That’s the main point.”

The remarks, coming from a member of Sarkozy’s Union for a Popular Movement who has consistently pressed the government to rein in its deficit, show the challenges facing Sarkozy as he seeks to defend France’s top credit rating while also preparing for an election that is barely four months away. Francois Hollande, the opposition Socialist Party’s presidential candidate, has repeatedly predicted new austerity measures.
   
For Marini, the ability of European leaders to put into action a Dec. 9 plan that would place constitutional limits on deficits is the most credible way to protect the credit rating. Sarkozy’s ability to change the constitution has been hampered since the Socialists gained a majority in the Senate for the first time in September.

                        European Package

“Everything is linked to the putting in place of the package agreed to at the last European summit,” Marini said. “A downgrade would target the euro zone and question its ability to tackle its own internal problems. The specific French case clearly exists, but is something quite secondary.”

Failure to implement the package risks undermining confidence, hurting growth and increasing pressure to eventually revise the budget, Marini said.

“The bigger the delay, the more likely we’ll have to look at the growth rate and the consequences for fiscal policy,” he said.

Marini praised the European Central Bank for stepping up its support for euro-area governments in recent weeks by offering three-year loans to banks and buying government bonds.

“The ECB’s position has evolved to a large extent, though international investors have not fully realized this,” Marini said. These programs “demonstrate that the ECB is ready to tackle the real problems.”